Bad banks

I must be completely confused about the bad bank idea. Here's one version as explained by Max Holmes in a NYT op ed piece. Holmes' idea is that the

banks would … convey [their toxic] assets at year-end, audited book values. … [After such a transfer] the stock prices of the good banks are likely to soar, as they will be the … best capitalized and cleanest banks in the world.

Here's what I don't get. If the banks are going to sell their toxic assets at "year-end, audited book values" why don't they just do that now and sell them in the market at that price? If those are real values, there will be buyers. On the other hand, if these "year-end, audited book values" are unrealistically high, the taxpayer is getting screwed, and the bankers, who should be paying the price, get off free.

Worse, the toxic assets are probably not assets at all but liabilities. Otherwise, banks could simply give them away and have clean books. But if they are liabilities, why should the government (or anyone else) pay anything at all for them? We, the taxpayers, should be paid to take them. The minimum we should be paid to take them is ownership of the banks that are holding them as liabilities. That may not cover the liabilities, but it's probably the best that can be done.

Holmes is not a stupid guy. According to a brief bio, "He holds a BA degree from Harvard College, a JD degree from Columbia Law School, and an MBA degree from Columbia Business School." So what am I missing? The only thing that occurs to me is the disclosure Holmes made in his article.

The government could hire professional money managers, working under an incentive-heavy compensation plan, to oversee the liquidation. (Disclosure: firms like mine might be potential candidates for such a job.)

So is that it? Is this all a con to get a lucrative money management contract? I'm normally not that cynical. But I sure can't think of any other explanation. It seems that the only people who are pushing the bad bank idea are those (like bankers and now potential money managers) who will make lots of money from it. Will someone tell me why I'm wrong.